I agree, what he is doing is being verbally and emotionally abusive to your daughter. Counseling would be a good way to try to resolve this issue and heal your family. It's also neutral ground with a non-biased professional so neither party feels they are being out numbered. My husband is a step-dad and I'm a step-mom myself and in my home we don't use the word "step", we treat all 5 of the children the same across the board regardless of biology, they are all our daughters.
My two daughters 18 and 17 have a step-mom also and what you're going through, my 17 yr old daughter has endured this from her step-mom over the years. The step-mom doesn't treat the 18 yr old as harsh as she does the 17 yr old. She has a daughter who is treated like gold and can do no wrong. She has been verbally and emotionally abusive to my 17 yr old and my ex-husband has even witnessed it first hand but says nothing and does nothing. My 17 yr old has spoken up to her dad about this many times and still nothing. He says as long as the step-mom isn't chewing him out & on his back he doesn't care. My 17 yr old feels her dad failed her as a parent. That your parent is suppose to protect you, stand up for you & your rights and your right to be treated like a human being. She feels if her own father won't stand up for her then who will, she'll have to do it herself. She was his daughter long before the step-mom was his wife and she'll always be his daughter, he should be putting her first and he's not.
I'm fortunate that this situation was only a portion of the family she was exposed to and that the rest is positive and supporting. My daughter today is a very strong person and yes, that situation did have effects on her emotionally but thankfully she came to me & her step-dad for support and to talk about what was going on and how it made her feel. She says that helped greatly to have someone to talk to who understood that it really was making her feel bad.
You'll have to decide what's best for your daughter & family. Good luck & I hope for the best.